SB 2476 Removes Patients From Billing Disputes and Serves as a Model for the U.S. Congress to Utilize as It Considers the Future of EMS Billing at the Federal Level
Austin, Texas – June 19, 2023 – The Texas EMS Alliance (TEMSA) is pleased to announce that Texas Governor Greg Abbott has signed SB 2476 into law. TEMSA applauds the 88th Texas Legislature’s work in creating SB 2476, which removes patients from billing disputes and ensures that EMS agencies are adequately reimbursed for the services that they provide.
Why Is SB 2476 So Important?
Approximately 85 percent of the nation’s EMS transports are handled by an out-of-network EMS agency. “Out of network” means the ambulance service does not have a contract with the patient’s insurance company to define coverage limits, pricing, or payment terms; the EMS agency is not in the health plan’s network.
Under the payment model before SB 2476 was enacted, both patients and EMS agencies suffered. Patients could face unexpected bills. Meanwhile, EMS agencies often found themselves being reimbursed at rates that failed to cover the cost to provide ambulance service. In some cases, EMS agencies did not receive any payment at all.
The out-of-network status often leads to reimbursement rates that are far below the cost of providing the service, reimbursements that are sent directly to the patient and delays in receiving reimbursement. What’s more, the patient may be caught in the middle of a payment dispute between the ambulance provider and the insurance company. In those instances, the patient often is personally responsible for paying the difference between the billed charge and the insurance payment (balance billing), in addition to any applicable copayments and deductibles.
The 2021 Texas Legislature featured a strong push to remove patients from the middle of these disputes. However, the effort was not resolved due to stakeholders failing to reach a solution that would have also protected Texas’ EMS delivery system.
How Will the New Law Change the Situation?
SB 2476 is unique in that it both protects both patients and EMS agencies.
Patients are removed from billing disputes.
From the EMS perspective, SB 2476 recognizes the authority that the local government has in overseeing and regulating EMS.SB 2476 requires health plans pay EMS agencies at the rates set, controlled or regulated by the local (county, municipal, ESD) governmental entity where the service originated. Where locally set rates do not exist, plans will pay the lesser of the billed charge or 325 percent of the prevailing Medicare rate.
Direct and prompt pay provisions are included, and the balance billing of patients is prohibited.
What Are the Next Steps for SB 2476?
The law directs the Texas Department of Insurance (TDI) to establish a database of locally set rates by January 1, 2024. Local governmental entities will submit their local rates to the TDI database. This will enable health plans to check local rates through one database, rather than multiple searches. Any agency that does not report locally set rates submitted to the TDI database will be reimbursed at the lesser of their billed charge or 325 percent of Medicare. The patient will still be responsible for copayments, deductibles and services not covered by their health plan.
This law only applies to health plans regulated by the state, and that represents approximately 20 percent of insured patients.
The Texas solution goes into effect January 1, 2024. It expires September 1, 2025, to allow for adoption of a pending federal rule. However, it could be extended, if necessary.
About the Texas EMS Alliance
The Texas EMS Alliance was founded in 2014 to serve as the unified voice of Texas EMS agencies. Over 85 public, fire-based, private, non-profit and hospital-based Texas EMS agencies providing 9-1-1 service to rural and urban Texas communities represent TEMSA.